How to rebalance your portfolio: a step-by-step checklist

Your target mix

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Write down the mix you chose: how much in stocks, bonds and cash.
Without a written target, you can’t tell whether you’ve drifted.
Decide when you’ll check: on set dates, or when a part drifts past a limit you set.
Investor.gov notes that many experts suggest every six or twelve months, or a set percentage of drift.
Put the check date on your calendar.
FINRA suggests considering rebalancing as part of a yearly review of your investments.
Make sure you’re not concentrated in one stock, sector or country.

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Pull up your statements and write down what each part is worth today.
Count every account: workplace plan, IRA or ISA, and taxable accounts.
Work out the percentages: each part divided by the total.
Compare them with your target mix.
If the drift is small, leave it.
Trades can cost fees and trigger taxes, so small moves often aren’t worth it.
Ask whether the target still fits: have your goal, timeline or situation changed?

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Try new money first: send contributions to the part that has fallen behind.
You sell nothing, so there’s no tax to pay. It’s one of the three ways investor.gov and FINRA describe.
If you invest every month, change where the monthly amount goes for a while.
If you must sell, check which account you’re selling in.
FINRA notes that selling at a gain in a taxable account can mean capital gains tax. In the UK, there’s no Capital Gains Tax on shares in an ISA.
If that’s not enough, sell some of what has grown too big and buy what has fallen behind.
Before you sell, check what each trade costs.
US: check whether a gain would be short- or long-term.
Held more than a year, it’s taxed at 0%, 15% or 20%; one year or less, as ordinary income.
US: selling at a loss? Don’t buy the same or a substantially identical investment within 30 days before or after.
That’s a wash sale, and the IRS won’t let you deduct the loss.
UK: check your Capital Gains Tax allowance.
Gains above £3,000 a year can be taxed. If you buy the same shares back within 30 days, special rules set the cost.
Place trades one at a time and check each confirmation.

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Save today’s percentages and the trades you made, with the date.
Put the next check on your calendar.
Keep records of gains and losses for your tax return.
If rebalancing feels like too much, ask about funds that manage the mix for you.
FINRA and investor.gov describe lifecycle, or target date, funds, which shift their mix gradually over the years.